Question: Zayas has identified the following two mutually exclusive projects. Year Cash Flow (A) Cash Flow (B) 0 -$78,500 -$78,500 1 $43,000 $21,000 2 $29,000 $28,000
Zayas has identified the following two mutually exclusive projects.
| Year | Cash Flow (A) | Cash Flow (B) |
| 0 | -$78,500 | -$78,500 |
| 1 | $43,000 | $21,000 |
| 2 | $29,000 | $28,000 |
| 3 | $23,000 | $34,000 |
| 4 | $21,000 | $41,000 |
a. What is the IRR for each project and if you apply the IRR decision rule which project would you accept
b. If the required return is 11% what is the NPV for each of these projects? Which project would you choose?
If possible, please show formula and do not use excel. Thanks!
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